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| Nortel in bankruptcy protection | Nortel in bankruptcy protection |
| (10 minutes later) | |
| Nortel Networks, North America's biggest maker of telephone equipment, has filed for bankruptcy protection. | Nortel Networks, North America's biggest maker of telephone equipment, has filed for bankruptcy protection. |
| The move by the firm, based in the Canadian city of Toronto, came as the global economic downturn continued to eat into its already fragile business. | The move by the firm, based in the Canadian city of Toronto, came as the global economic downturn continued to eat into its already fragile business. |
| Nortel employs about 95,000 people worldwide, including about 2,000 in the UK, where it is a key Olympic sponsor. | |
| Under US Chapter 11 bankruptcy protection law, a firm can keep trading while it aims to sort out its finances. | Under US Chapter 11 bankruptcy protection law, a firm can keep trading while it aims to sort out its finances. |
| Nortel said that the bankruptcy protection was intended to help it "emerge from this process as a more focused, financially sound and competitive company". | |
| The decision was made while it had sufficient funds to run operations and to cover restructure costs, it added. | |
| The filing was made a day before the firm was due to make a $107m interest payment on outstanding loans. | |
| Nortel said it had been in the process of revamping the firm since late 2005, the firm said, but that the global financial crisis and recession had "compounded its financial challenges and directly impacted its ability to complete this transformation". | |
| Nortel shares fell by 76% in pre-market trading, with analysts saying the move showed that management believed the situation would deteriorate. | Nortel shares fell by 76% in pre-market trading, with analysts saying the move showed that management believed the situation would deteriorate. |